Assume that markets are efficient. Suppose that during a trading day, important new information is released for the first time concerning American Golf Inc. This information indicates that the firm has lost a contract for a large golf-course project that the market widely believed the firm had secured prior to the news. How would you expect the price of a share of stock to react to this information?

a. The value of a share decreases over an extended period of time as investors begin to sell shares in the company.

b. The value of a share will decrease to a price above what would be considered appropriate, because of the greatly decreased demand for the shares. Eventually the price would rise back up to the correct level.

c. The value of a share will decrease immediately to a price that reflects the value of the new information.

d. More information would be needed to determine the movement in the price of the stock.